More consumers cruise to eBay to buy, sell cars
11-17-2003, 11:40 AM
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More consumers cruise to eBay to buy, sell cars
More consumers cruise to eBay to buy, sell cars
By Charles E. Ramirez / The Detroit News
When Karl Nelson car shops, there's no rushing to the dealership before it closes and no pressure to buy on the spot.
There's just Nelson, his computer and the growing car-buying bazaar on eBay.
The 26-year-old Plymouth man has bought three cars on eBay, the last a 1990 Nissan minivan for $1,222 -- less than half its Blue Book value. The license plate: ON EBAY.
Nelson is one of a growing number of consumers who have turned eBay Motors into the world's largest online marketplace for used vehicles, parts and accessories, with an estimated $4.2 billion in goods sold this year. EBay Inc., the 3-year-old division of the San Jose, Calif.-based auction powerhouse, expects to sell 500,000 vehicles this year.
EBay Motors' growth -- it now averages 7 million visitors a day -- proves more and more people are using the Internet to not only research car purchases, but also to buy and sell them.
The division was launched in early 2000 after eBay noticed people were selling their used vehicles on the site's model cars pages. Today, eBay Motors is the Web company's largest and fastest-growing business, accounting for up to 20 percent of eBay's overall sales increases in the past two years. It charges sellers $40 to list a vehicle; $40 when it's sold.
Although Web auto sales are only a fraction of the 43 million used cars sold in the United States annually, eBay Motors has become one of the largest U.S. used-car dealers and the biggest among the online vehicle auction sites.
"We sell more cars before 9 a.m. than many dealers sell all year," said Simon Rothman, who is an eBay Motors' global vice president. Most of the site's users are individuals and independent car dealers, Rothman said.
"EBay is a market maker in the used vehicle business," said David Wassmann, chief marketing officer for StoneAge Corp. of Troy. "What they've done is very impressive."
StoneAge owns and operates a Web site -- Cars.com -- that links consumers with new car dealers, sells some used cars and gives pricing and loan information. The company says 1.6 million consumers use its services every month.
The emergence of online car buying poses a serious threat to traditional classified advertising and car buying guides, as many sellers are choosing to put their car online with a picture and full description rather than paying for a small print ad.
For car dealers, selling vehicles online has produced mixed results. For some, primarily small independent dealers, it's boosted business. Other dealers see it as a threat or find it too complicated. And a third group says it's a good way to sell vintage vehicles or get rid of slow sellers.
Dealers opt out
A recent study by financial firm Smith Barney found that 40 percent of used car dealers in the United States have either stopped listing vehicles on eBay Motors or ruled out using it after looking it over.
"In particular, the skeptics cite cost and complexity as the service's primary drawbacks," Lanny Baker, a Smith Barney analyst, wrote in the report.
Smith Barney recently lowered its rating of eBay's stock to "sell" over concerns that its automotive sector may struggle to grow in the coming years. Shares fell after that, but have since recovered, closing Friday at $54.38, down $1.85.
Rothman says Smith Barney's report looked only at automakers' dealer networks and the U.S. market -- not at its entire customer base. He said eBay Motors plans to upgrade and expand its site, making it more user-friendly for customers and independent car dealers in particular.
Most franchise car dealers don't see eBay as a threat, said Paul Taylor, chief economist for the National Automobile Dealers Association. "They're pleased when eBay can help them move either a used specialty vehicle or a model that isn't selling well off of their lot," he said. "But sometimes, they're concerned about some of the other people who sell vehicles on eBay and misrepresent their cars or are in business without a license."
"That can ... make consumers skeptical about buying online."
Automakers don't necessarily see eBay as a threat to their dealer networks, either.
"If you're buying and selling a used car and you have no trade-in, then there's absolutely no reason why you shouldn't use the Internet -- whether it's eBay or something else," said Bob Lutz, General Motors Corp.'s vice chairman and chairman of the company's North America Division. "But people keep forgetting most people have a trade and they need it taken off of their hands."
"Somebody's got to prep it, somebody's got to service it. To go to a dealer is a small price to pay."
Car lot replaced
For some small used car dealers, eBay Motors has replaced their car lot.
"One hundred percent of my living is now made by selling used cars on eBay," said John Parello, who owns Parco Auto Sales in Trevor, Wis. "I don't think I've shown or sold a used car to a customer on my lot in over a year."
Parello said automakers' zero percent financing hurt his business. He started using eBay in October 2002 after selling only seven cars that year. He estimates he's sold 100 on eBay since then.
"I'm making more money now using eBay than I ever have before," he said.
Nelson, the Plymouth man who has bought three cars on eBay, is one of 85 million registered eBay users. The political campaign worker from Plymouth considers his Nissan purchase a good buy, even after adding in the $250 in costs to fly down to Tennessee to pick it up. He's also bought a 1988 Honda Accord and bought and sold a 1960 Citroen station wagon on the site.
"It's a buyer's market on eBay Motors," he said. "And if you're looking to get a good deal on a used car, the Internet is the place to do it."
Detroit News Staff Writer Ed Garsten and Bloomberg Business News contributed to this report.You can reach Charles E. Ramirez at (313) 222-2401 or cramirez@detnews.com.
By Charles E. Ramirez / The Detroit News
When Karl Nelson car shops, there's no rushing to the dealership before it closes and no pressure to buy on the spot.
There's just Nelson, his computer and the growing car-buying bazaar on eBay.
The 26-year-old Plymouth man has bought three cars on eBay, the last a 1990 Nissan minivan for $1,222 -- less than half its Blue Book value. The license plate: ON EBAY.
Nelson is one of a growing number of consumers who have turned eBay Motors into the world's largest online marketplace for used vehicles, parts and accessories, with an estimated $4.2 billion in goods sold this year. EBay Inc., the 3-year-old division of the San Jose, Calif.-based auction powerhouse, expects to sell 500,000 vehicles this year.
EBay Motors' growth -- it now averages 7 million visitors a day -- proves more and more people are using the Internet to not only research car purchases, but also to buy and sell them.
The division was launched in early 2000 after eBay noticed people were selling their used vehicles on the site's model cars pages. Today, eBay Motors is the Web company's largest and fastest-growing business, accounting for up to 20 percent of eBay's overall sales increases in the past two years. It charges sellers $40 to list a vehicle; $40 when it's sold.
Although Web auto sales are only a fraction of the 43 million used cars sold in the United States annually, eBay Motors has become one of the largest U.S. used-car dealers and the biggest among the online vehicle auction sites.
"We sell more cars before 9 a.m. than many dealers sell all year," said Simon Rothman, who is an eBay Motors' global vice president. Most of the site's users are individuals and independent car dealers, Rothman said.
"EBay is a market maker in the used vehicle business," said David Wassmann, chief marketing officer for StoneAge Corp. of Troy. "What they've done is very impressive."
StoneAge owns and operates a Web site -- Cars.com -- that links consumers with new car dealers, sells some used cars and gives pricing and loan information. The company says 1.6 million consumers use its services every month.
The emergence of online car buying poses a serious threat to traditional classified advertising and car buying guides, as many sellers are choosing to put their car online with a picture and full description rather than paying for a small print ad.
For car dealers, selling vehicles online has produced mixed results. For some, primarily small independent dealers, it's boosted business. Other dealers see it as a threat or find it too complicated. And a third group says it's a good way to sell vintage vehicles or get rid of slow sellers.
Dealers opt out
A recent study by financial firm Smith Barney found that 40 percent of used car dealers in the United States have either stopped listing vehicles on eBay Motors or ruled out using it after looking it over.
"In particular, the skeptics cite cost and complexity as the service's primary drawbacks," Lanny Baker, a Smith Barney analyst, wrote in the report.
Smith Barney recently lowered its rating of eBay's stock to "sell" over concerns that its automotive sector may struggle to grow in the coming years. Shares fell after that, but have since recovered, closing Friday at $54.38, down $1.85.
Rothman says Smith Barney's report looked only at automakers' dealer networks and the U.S. market -- not at its entire customer base. He said eBay Motors plans to upgrade and expand its site, making it more user-friendly for customers and independent car dealers in particular.
Most franchise car dealers don't see eBay as a threat, said Paul Taylor, chief economist for the National Automobile Dealers Association. "They're pleased when eBay can help them move either a used specialty vehicle or a model that isn't selling well off of their lot," he said. "But sometimes, they're concerned about some of the other people who sell vehicles on eBay and misrepresent their cars or are in business without a license."
"That can ... make consumers skeptical about buying online."
Automakers don't necessarily see eBay as a threat to their dealer networks, either.
"If you're buying and selling a used car and you have no trade-in, then there's absolutely no reason why you shouldn't use the Internet -- whether it's eBay or something else," said Bob Lutz, General Motors Corp.'s vice chairman and chairman of the company's North America Division. "But people keep forgetting most people have a trade and they need it taken off of their hands."
"Somebody's got to prep it, somebody's got to service it. To go to a dealer is a small price to pay."
Car lot replaced
For some small used car dealers, eBay Motors has replaced their car lot.
"One hundred percent of my living is now made by selling used cars on eBay," said John Parello, who owns Parco Auto Sales in Trevor, Wis. "I don't think I've shown or sold a used car to a customer on my lot in over a year."
Parello said automakers' zero percent financing hurt his business. He started using eBay in October 2002 after selling only seven cars that year. He estimates he's sold 100 on eBay since then.
"I'm making more money now using eBay than I ever have before," he said.
Nelson, the Plymouth man who has bought three cars on eBay, is one of 85 million registered eBay users. The political campaign worker from Plymouth considers his Nissan purchase a good buy, even after adding in the $250 in costs to fly down to Tennessee to pick it up. He's also bought a 1988 Honda Accord and bought and sold a 1960 Citroen station wagon on the site.
"It's a buyer's market on eBay Motors," he said. "And if you're looking to get a good deal on a used car, the Internet is the place to do it."
Detroit News Staff Writer Ed Garsten and Bloomberg Business News contributed to this report.You can reach Charles E. Ramirez at (313) 222-2401 or cramirez@detnews.com.
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